I continue to blog as little as possible this month, but sometimes news won’t let you be. Consider today’s report from the Commerce Department that personal income fell 3.2 percent in the Seattle metro area last year compared with the national average of a 2.8 percent decline. That’s not a misprint. The Seattle-Tacome-Bellevue metro area actually gained 1.5 percent in the recession dog days of 2008.
Nor are we alone. Other declines included Silicon Valley, 3.8 percent; New York, 4.1 percent; Phoenix, 5.2 percent and Naples, Fla., 7.1 percent. In the region, Portland personal incomes declined 3 percent, Spokane slipped 0.6 percent and Wenatchee and Yakima both 0.8 percent. Olympia fell 1 percent while Bellingham dropped 2.6 percent. Kennewick-Pasco-Richland and Longview each gained 1 percent.
There’s no single cause for the declines — and Seattle personal income remains well above the national average — but it’s yet more evidence of the damage of the lingering recession and fragile “recovery.” Many companies cut hours and froze wages. The scarier scenario is that the report points to potential deflation.
In themselves, falling personal incomes are a big drag in a consumer-focused economy.
Meanwhile, researchers at the San Francisco Fed, not an alarmist bunch, have a new report looking at the chances for another recession in the next two years. The conclusion: data suggest a “significant possibility.”
My prediction has been that Seattle would better the nation in the “recovery.” Yet the weaker the expansion, the greater the strain here, even with a diversified economy and ties to recovering Asia.
Today’s Econ Haiku:
Hurd fudged expenses
Yet his severance is sweet
Shareholders eat it